Tax-Exempt Status Protects Shipping Inspector's $600-Million Profit

Large nonprofit entities that essentially function like businesses but pay no taxes on income running into the hundreds of millions of dollars are the subject of a Bloomberg Markets magazine examination. The article focuses on the Houston-based American Bureau of Shipping, which inspects independently owned vessels on behalf of the U.S. Coast Guard vessels and paid no income taxes last year on revenue $3.17-billion and profits of nearly $600-million.

The bureau, which consists of member shipping companies, has been a registered U.S. nonprofit since 1862 but has recently lost its tax exemption in China, South Africa, and other countries where authorities judged it is essentially a for-profit company.

The article also looks at similarly lucrative nonprofit organizations and trade groups such as the National Football League, the National Hockey League, and the U.S. Polo Association and the salaries and perks provided to such groups' top executives.